“If the Senate confirms him, Mr. Bernanke will arguably become the most powerful economic leader in the world.”
That is an interesting choice of words and a tall order for the former Princeton economics professor and member of the Federal Reserve Board of Governors or anyone for that matter.
Not to say that Mr. Bernanke isn’t qualified for the job. He was educated at Harvard, taught economics at Princeton and has real-world experience as a member of the Fed board and in his current White House post. He has long credentials as an economist. It just seemed like the NY Times offered a strange description of the Fed Chairmanship. Powerful – yes. The most influential economic voice – yes.
Leader? That is where I have to stop and scratch my head. Is the Fed Chairman a de facto leader? Can he become a leader? Whom does he lead? Markets? Banks? The Board of Governors? Day traders?
I think I preferred this quote from the same article,
“As chairman of the Fed, he will be more than first among equals. The Fed chairman is the final arbiter of monetary policy”
Okay, I seem to like this a little better. I guess in a sense, he will be a leader. He will gather data, listen to subordinates, gather consensus and make difficult decisions. One thing we know, markets rise and fall on the Fed Chairman’s words. And they rose on the news of Mr. Bernanke as the top choice — a good sign for Bernanke’s confirmation prospects.
“This is what the markets expected,” noted David Wyss, chief economist at Standard and Poor’s in New York.
Summing up the thoughts of the nation and Old Fogey's Favorite Quotes, he also quipped, “We probably got Monday’s little rally because everyone’s happy it wasn’t Bush’s accountant.”
One of the things that jumped out at me about Mr. Bernanke was his emphasis on trying to give clearer signals and expectations to the market. Reuters reported the following:
-- He has long advocated the Fed adopt a publicly stated inflation target, a step Greenspan has steadfastly opposed.
-- At the Fed, he argued policy-makers could improve the effectiveness of interest-rate policy by offering more information on their economic and policy views. "If monetary policy is like driving a car, then the car is one that has an unreliable speedometer, a foggy windshield and a tendency to respond unpredictably," he said in December.
I like leaders who show transparency and who let their followers know what their expectations are.
Posted by: Tim Stay | October 27, 2005 2:47 PM | Permalink to Comment